Crypto's DEX Leverage Turmoil: $1.19 Billion Disappears, Revealing Market Vulnerabilities

On September 26, 2025, the cryptocurrency market saw a major wave of liquidations, with more than $1.19 billion in leveraged trades erased from both centralized and decentralized platforms. The most notable was a $29.1 million

(ETH) long position on Hyperliquid, which marked the largest single liquidation within 24 hours and emphasized the increasing impact of decentralized perpetual exchanges on market volatility. Ether was responsible for $448 million of the total liquidations, while followed with $278 million, and nearly 90% of the losses came from long trades title1 [ 1 ].

Hyperliquid, a decentralized exchange (DEX) recognized for its on-chain operations and lack of KYC requirements, recorded $281 million in liquidations, second only to Bybit’s $311 million. Before the event, traders on the platform had a strong bullish stance, with 97% of positions being long title1 [ 1 ]. This episode came after a separate $306 million

liquidation in March 2025, which prompted Hyperliquid to lower ETH leverage from 50x to 25x as a risk control measure title2 [ 2 ].

A trader known as AguilaTrades demonstrated the dangers of high leverage, losing a total of $37.5 million on Hyperliquid. The trader started with a $10 million position at 30x leverage, backed by $330,000 in collateral, but was liquidated in under half an hour. Further attempts to recover, including a $3 million ETH long, led to more losses title4 [ 4 ].

These liquidation patterns reveal underlying market vulnerability, with Bitcoin hovering near $111,400 amid sharp price swings. Analysts pointed out that such events often serve as "reset moments" for trend reversals, but widespread over-leveraging in major and high-volatility tokens could mean continued downward pressure title1 [ 1 ]. During the March 2025 event, Hyperliquid’s HLP Vault also took a $4 million hit, leading to $166 million in net withdrawals and shaking investor trust title3 [ 3 ].

Market analysts emphasized that decentralized exchanges play a significant role in increasing liquidation risks. Nick Ruck from LVRG Research noted a capital shift from Bitcoin to alternative coins, with

DEXs such as Hyperliquid and Aster enabling this trend title1 [ 1 ]. Still, the close ties between leveraged trades on DEXs and centralized exchanges raise concerns about overall market stability, especially as platforms like Hyperliquid handle more liquidations.

This episode highlights the importance of managing risk when trading with leverage. With Ethereum’s price moving between $2,800 and $3,000 and Bitcoin testing crucial support, traders are encouraged to keep a close eye on technical signals and liquidity. The crypto market’s capacity to withstand such disruptions will rely on regulatory developments, greater institutional involvement, and the robustness of decentralized systems to handle large-scale liquidations title1 [ 1 ].